Buyers Aren’t Liars…or, Usually, Experts!
Yesterday evening I was engaged in a conversation with the composer Joan LaBarbara about the ways, good and bad, in which the Internet has opened the world of music to the general public. The Internet has also opened the world of listings to the general public. And this too is good and bad. Access to information has certainly created better informed consumers. But knowing the listings does not create expertise. The training, focus, and market knowledge possessed by the better real estate agents simply cannot be duplicated by the lay person. Nowhere is this more evident than in the preparation of the Board package. In her wonderfully funny new book about moving to New York, “The Last Blind Date”, Linda Yellin includes a full chapter on her co-op purchase experience. The Board process made NO sense to a Chicagoan like Linda, and frankly I think many New Yorkers, even those who think they know, really don’t understand just how time consuming and critical this piece of the puzzle can be. To make matters worse for squeamish prospective purchasers, established condos seem to be taking a page from the co-op playbook and requiring extensive Board packages themselves. So probably, if you as a buyer aren’t buying a townhouse or a condo offered by the sponsor, a Board package is in your future. So let’s open 2012 with a few tips for navigating the process:
* The Board package, when well executed should present a concise and comprehensive view of your life-familial, social, and financial. It should give the Board information about where you come from, what your interests are, what philanthropic endeavors occupy your time, what your kids are like-everything necessary to create a full picture.
* You will need to create a complete financial statement, along with back-up schedules and independent verification of all your assets. You will also need at least a couple of years of (probably complete) tax returns.
* The Blumberg form of co-op contract, which is used by most attorneys, only allows two weeks for Board package preparation. Take my word for it, this isn’t enough, especially when you include broker review. Make sure to get yourself three weeks rather than the two in the printed form.
* Really give some thought to who will write your social and business reference letters. These should be planned to include people who have known you a long time, people who know your kids, people who know your philanthropies; the letters should contain a full range of different perspectives. And please don’t you write them all or send the authors the same sample letter! It wastes a lot of everyone’s time if we have to go back to Square One with the letters because they are all written in the same font with the same salutation (a sure sign that the buyer wrote them all) or if they all contain the same middle paragraph ( a sure sign that the writers all received the same sample letter).
* About five days before the package is finally submitted, you will become so fed up with the process that it will actually seem sensible to you to a) assassinate your broker, b) move to a yurt in Outer Mongolia, or both. Don’t despair; this is the darkest hour before the dawn. And please don’t take it out on your agent either. Boards really ARE looking for all the details, clearly and sequentially presented. Remember, everyone you know who lives in a co-op has been through the same thing.
* Finally, when you are in the mood described in the bullet point above, do not say, or believe, that it is OK to hand in an incomplete package because “if they want more information they can come back and ask me for it.” Yes, they can, but often they won’t. They will just turn you down. It is far easier to provide all the detail the requirements, and your agent, ask for up front.
A Board package is time consuming, frustrating, and invasive. But it is the only way to end up with the co-op you want to live in. So take a deep breath, accept it, and work with your agent to make the process as painless as possible. No offense, but we really DO know more about this process than you do.